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John G. Wright

Economic Consequences of the Stalin-Hitler Pact

Soviet Economy Cracking Under War Strain

(17 October 1939)

From Socialist Appeal, Vol. III No. 79, 17 October 1939, p. 3.
Transcribed & marked up by Einde O’ Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).


Since September 11, one week prior to the issuance of orders to the Red Army to march into Poland, the official Moscow press has ceased publishing all data relating to the daily production in key industries: iron, steel, rolled steel, freight car loadings, and the automotive industry. Never before has the publication of these figures been suspended for so long a period. No official information whatsoever is now available relating to the progress of the Third Five Year Plan inasmuch as the publication of all other data was suspended early in 1938. The only possible interpretation for this veil of secrecy is that production is on the verge of breakdown, if it has not already collapsed.

The figures previously published – for August and the first week in September – unmistakably denoted a decline in production, in some instances below 1936 levels. The decline since then has apparently assumed catastrophic proportions.

Labor Shortage Deepens Crisis

One of the primary reasons for the current crisis, as the Socialist Appeal has already reported, is an acute shortage of labor, accompanied by enormous labor turnover and aggravated by the mobilization of the army which has made further inroads into the already inadequate labor force.

The situation is so grave that the official press has carried unequivocal confirmation of it.

The crisis in oil production is depicted in great detail in Pravda for September 8, where we find the following significant statement:

“In Azneft (one of Baku’s biggest oil fields – JGW) the labor turnover has been enormous. In the past seven months the trusts have hired 12,960 workers but have dismissed 14,144. Among those who leave are not infrequently members of the engineering and technical staff. The turnover is to a large measure due to the impossibility of providing living quarters for all.”

V. Malyshev, People’s Commissar of Heavy Machine Building, is also quite outspoken about the crisis in his department. He writes:

“At the present time only 84% of the workers scheduled by the plan are working in the enterprises of our Commissariat, 10% less than the total employed in the same period last year. Yet our program has grown 20% as compared with last year.” (Pravda, September 16)

Huge Turnover in Labor Criticized

Eloquent as these admissions are, they pale in comparison with a statement printed in Pravda in connection with a review of a book just issued by the Institute of Economics and entitled: Labor in Socialist Society. In a review of this book, the author is criticized sharply for slurring over “self-criticism and analysis of the shortcomings in the organization of labor in recent years.”

“The causes of these shortcomings,” thunders the reviewer, “are reduced by the author almost exclusively to the consequences of the wrecking activities of Trotskyist-Bukharinite and other agents of capitalism ... But it is a mistake to reduce all our failings and lapses solely to wrecking. For instance, on the very important question of the labor turnover, the author gives a very detailed and interesting analysis of the causes of turnover in the period of intervention and civil war. But in illuminating this very same question for the recent years, he confines himself to data relating to a decline in labor turnover which began in 1932. Meanwhile, in 1938 and 1939 we have witnessed a considerable increase of labor turnover in a number of the most important branches of industry, especially in coal mining, iron ore production, heavy metallurgy, etc. Furthermore,this turnover has been one of the vital reasons for the failure of these branches of industry to fulfill the plans. The labor turnover is due primarily to shortcomings in the organization of labor and of wages, lack of attention to new workers, lag in light mechanization and so on.” (Pravda, September 14)

In the recent weeks the press has carried a great deal of this hypocritical indignation over the “shortcomings in the organization of labor and wages” and the living conditions of workers. But to remedy this, the bureaucrats must clamp down on their own privileges. And since this is out of the question they have sought to solve the crisis by intensifying the speed up. Since June, the workers have been forced to run two, ten, and as many as 30 lathes in the machine shops. (Pravda, September 15) All this under the slogan of “Extend Stakhanovism!” Stakhanov, together with other figureheads, has toured the USSR in a rabid campaign to put this speed up over. It has obviously failed. It has obviously met with resistance on the part of the workers.

Living Conditions Becoming Worse

Instead of improving, the living conditions of the workers are worsening. While food shortages are being vigorously deified as “slanders,” the papers carry reports of trials of speculators, food hoarders and“disorganizes of trade.” All such cases must be investigated and brought to trial within three days. (Pravda, September 14) In his “historic” radio speech announcing the invasion of Poland, Molotov was compelled to devote time to warn against speculation and to reassure the populace that there was no shortage of necessities and that rationing was not being envisaged.

Since the invasion of Poland,the press has carried only triumphant and patriotic articles, and glowing accounts of mass meetings in factories where resolutions are passed acclaiming the progress of the Red Army and pledging new records in production.

But the admissions as well as the even more eloquent reticences of the official press bespeak a situation that is diametrically opposite to the one Stalin seeks to depict. In our opinion it is by no means excluded that strikes are once again taking place in factories. The last time there were strikes was early in January, immediately after the passage of the Draconic labor laws, the primary intent of which was precisely to halt the labor turnover. In January, too Pravda ceased for a few days to publish the key data for production. Stalin’s latest “victories” are proving to be the most disastrous for his regime.

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